Payments Blog

False Declines: Not Good for Merchants

What is a false decline when you’re talking about credit card transactions?  Simply stated, it is when a GOOD transaction (order) is rejected by either the issuer or the merchant, due to suspected fraud.

According to a Javelin study, over 33 million people – or 15 percent of all cardholders - experienced a transaction that was falsely declined in 2014. These false declines totaled $118 billion in lost sales to merchants. This is both frustrating and costly to merchants, who are losing out on sales and returning buyers. Approximately 66 percent of the purchases that are lost are over $100 in value, and 40 percent of declines were over $250. It’s equally frustrating to the issuers, who are losing out on the interchange fees and the possibility that the consumer will stop using that card in the future.

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This is a huge problem. Almost 40 percent of consumers stopped using the card that was declined (or stopped shopping at the merchant), and an additional 25 percent decreased usage of that card. Regardless of which party was at fault for the false decline, strategies to decrease false declines will increase your sales, reduce consumer insults and increase consumer loyalty. We’ll talk more about strategies to reduce false positives later in the month

With One Connection to Cardinal, we can Drive your Digital Commerce.

Posted by Ian Poole

Ian Poole is currently the Sales Engineering Director with an overall responsibility of Technical Sales, Market Analysis, and designing the implementation of market leading eCommerce and mCommerce solutions for new and existing Cardinal Customers. With more than six years of industry experience, Ian has been involved in many aspects of the Cardinal organization, including direct Customer support, managing Direct and Channel Integration teams, and working with solution design. He played a critical role when leading the Direct and Channel Integration teams as Cardinal expanded. Ian provides a balance between business and technology, and has played a critical role in showcasing how One Connection to Cardinal can FutureProof his Customers’ payment needs. Ian frequently speaks at industry events, in the US and internationally. Mr. Poole has a Bachelor’s Degree in Business Administration from Washington & Jefferson College.

Find me on: LinkedIn Google+

Apr 12, 2016 8:30:00 AM

Topics: Fraud, false postives

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